Industry Executive Reveals How Digital Asset Could Boost CBDC Adoption
A digital asset expert has disclosed that cryptocurrency would one day benefit from interaction with central bank digital currencies (CBDCs). This comes when many see cryptocurrency as financial freedom away from government control. Some even view the concept of CBDC as the opposite of the ethos behind digital currencies.
A Complimentary Duo
According to Itai Avneri, the co-founder of INX, a crypto trading platform, there is a balance between crypto and CBDC despite their opposite features. Avneri noted that both digital assets could complement one another in the future when their benefits are considered more remarkable than their differences.
The INX co-founder compared CBDCs to regulated offerings, which he suggests would significantly benefit crypto funds if added to such offerings. The industry executive believes this would expose such financial pairings to a broader user base while boosting the confidence of crypto investors to trade in a regulated manner.
Furthermore, the executive noted that in his view of CBDC’s design, the centralized digital asset is a long journey before users experience its features. However, Avneri added that finding a balance between crypto and CBDC is what the industry could see as a “master art,” going by their use cases.
The expert noted that he has yet to come across any initiative enabling users to purchase BTC using a CBDC or any potential deal between the two assets. The industry executive also stressed the need for regulatory guidelines alongside decentralization because there are some vital aspects that policymakers need to consider.
For example, Avneri revealed that complete decentralization often overlooks guidelines like know-your-customer (KYC), which he believes comes with a catch that will not favor investors.
“Considering that working alongside government and central banks would require customers to identify themselves, which I believe is to protect them and improve trust in the industry.”
Building private Interaction with CBDC Use
The INX co-founder believes that CBDC users would be needed to navigate their ways and privately interact as they would when using physical cash. Meanwhile, the latest news comes after INX penned a deal with SICPA, an authentication platform that provides CBDC solutions to governments.
According to reports, INX was considered the first firm to carry out a tokenized initial public offering under the supervision of the US Securities and Exchange Commission (SEC) last year. Avneri is not the only industry executive with the same sentiment about the interaction of CBDC and cryptocurrency and how they can complement each other in the future.
A board member at the Swiss National Bank, Thomas Moser, disclosed that centralized finance like CBDC could bring more stability to developing and using decentralized finance (DeFi) like crypto assets. The executive director of the hedge fund platform ARK36, Mikkel Morch, echoed Avneri’s belief by stating that CBDCs pose no threats to crypto assets like Bitcoin. However, Morch added that CBDCs bear some risks, like Tether’s USDT stablecoin.
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